Saddam Hussein's effigy was pulled down again in Baghdad's Firdos Square at the weekend. But unlike the made-for-TV event when US troops first entered the Iraqi capital, the toppling of Saddam on the occupation's second anniversary was different.

Instead of being done by US marines with a few dozen Iraqi bystanders, 300,000 Iraqis were on hand. They threw down effigies of Bush and Blair as well as the old dictator, at a rally that did not celebrate liberation but called for the immediate departure of foreign troops.

For most Iraqis, with the exception of the Kurds, Washington's "liberation" never was. Wounded national pride was greater than relief at Saddam's departure. Iraqis were soon angered by the failure to get power and water supplies repaired, the brutality of US army tactics, and the disappearance of their country's precious oil revenues into inadequately supervised accounts, or handed to foreigners under contracts that produced no benefits for Iraqis.

From last autumn's disastrous attack on Falluja to the huge increase in detention without trial, the casualties go on rising. After an amnesty last summer, the numbers of "security detainees" have gone up again and reached a record 17,000.

The weekend's vast protest shows that opposition is still growing, in spite of US and British government claims to have Iraqis' best interests at heart. It was the biggest demonstration since foreign troops invaded.

Equally significantly, the marchers were mainly Shias, who poured in from the impoverished eastern suburb known as Sadr City. The Bush-Blair spin likes to suggest that protest is confined to Sunnis, with the nod and wink that these people are disgruntled former Saddam supporters or fundamentalists linked to al-Qaida, who therefore need not be treated as legitimate. The fact that the march was largely Shia and against Saddam as much as Bush and Blair gives the lie to that.

Some Sunnis attended the march, urged to go there by the Association of Muslim Scholars, which has contacts with the armed resistance. This too was an important sign. Occupation officials consistently talk up the danger of civil war, usually as an argument for keeping troops in Iraq. It is a risk that radicals in both communities take seriously.

Moqtada al-Sadr, the Shia cleric who organised the latest march, recently joined forces with the National Foundation Congress, a group of Sunni and Shia nationalists, to affirm "the legitimate right of the Iraqi resistance to defend their country and its destiny" while "rejecting terrorism aimed at innocent Iraqis, institutions, public buildings and places of worship".

The key issue, now as it has been since 2003, is for the occupation to end quickly. Only this will reduce the resistance and give Iraqis a chance to live normally. In a new line of spin - which some commentators have taken to mean that the US is preparing for a pullout - US commanders claim the rate of insurgent attacks is down.

The figures are not independently monitored. Even if true, they may be temporary. Thirdly, they fly in the face of evidence that suggests the US is failing. Most of western Iraq is out of US control. The city of Mosul could explode at any moment. Ramadi is practically a no-go area.

In any case, the US is only talking of a possible reduction of a third of its troops next year. This will still leave 100,000. The US argues that a complete withdrawal has to be "conditions-related, not calendar-related" or, as Blair puts it, there can be no "artificial timetable". By that, they mean Iraq's security forces have to be strong enough to replace the Americans and British, a totally elastic marker.

That is surely the message that Donald Rumsfeld, the US defence secretary, is giving this week on his ninth trip to Baghdad since April 2003. Whenever there is an alleged transfer of power to Iraqis, this time to a "government" elected in a flawed poll, Rumsfeld comes with instructions.

His public warning is for Iraq's leaders not to make any changes in the army and interior ministries, or postpone the writing of a constitution. Behind the scenes, he is probably telling them not to ask for a withdrawal timetable, and sounding them out on the opposite. The US has indicated that it wants permanent bases in Iraq, just as it does in Afghanistan - which is why the joint Sadr-National Foundation Congress statement says the government "will have no right to ratify any agreement or treaty that might affect Iraq's sovereignty, the unity of its territory and the preservation of its resources".

Poland has just announced it is pulling out of Iraq at the end of the year, just as Spain did last year. Italy is wavering on the verge of a similar decision. If Blair wants to regain the trust he lost before the Iraq war, his best approach would be to announce the same by May 5. He would help Iraqis as well as himself.